Trying to buy a house from a family member
I’m needing a little help on how to make a deal I have work out.
Background:
My aunt just inherited a home (free from debt) from my recently deceased grandmother. The house is in decent shape but it needs some cosmetic work to get it back into shape. My aunt and I have agreed that she would sell it to me, as is, for a good price.
The issue is that I’m cash poor right now in other investments and need to wait to sell a property I have slated to go on the market later this spring to 1031 into this property.
She is fine with waiting to make it work on my end but I’d like to get in and begin doing some of the repairs prior to this spring when leasing is in its prime time. She also doesn’t want to have to keep paying the holding costs if she doesn’t have to.
How can we set this deal up where I can take possession of the house and begin work while waiting to do the sale until I’ve got another house sold to purchase this one? I’ve agreed to pay for holding costs and take responsibility for my work. The issue is how do we handle a situation where the house is taken out by a storm, or some other insurance claim happens prior to the property being in my possession? I’ve talked to my insurance broker and he said that it may be tricky getting an insurance policy to cover my interest in a property I don’t yet own.
I want to make sure that both my aunt and I are both covered and not at risk during the transition period.
Any ideas or help with this situation would be much appreciated!